Industry experts talk about monetization metrics

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Game Connection is an excellent event for developers to find partners, meet publishers, and share industry insights. In November 2017, Appodeal decided to host a panel called “Monetization Metrics for Success,” and invited industry experts to share their opinions and experience. These insights will be helpful for anyone who wants to understand the strategies that major mobile app companies have been using to thrive.

Daily Revenue and eCPM are the basics

Juanjo Monge, CMO of Lab Cave Games, stated “since we have a specific business model, with more than 350 casual games in both stores (Apple AppStore and GooglePlay), Daily Revenue and eCPM easily shows us the health of the company and the health of the ad networks, from where we made 90% of our revenue.”

An impression counts as each time an ad is fetched from its source, and eCPM calculates the performance of an ad dividing the total earnings that the ad generated by the total number of impressions. It is expressed in thousands, so this metric can be easily used to compare the results of several ads and find out which works better in your app.

There is a direct relation between these two metrics that Juanjo qualifies as “the simplest way to check how things are going on.” Both daily revenue and eCPM show how your ads performance is generating ad revenue in a pretty straightforward way.

How ARPDAU brings deeper insight

“ARPDAU is for me the most important metric because it really tells you how much money you are making per day per user,” said Juanjo. He explained this is the only way to know if your app’s ad strategy is correct, and how much of it you need to optimize to make it even better.

Fuero Games CEO, Stanisław Fiedor, agrees with the above. He believes that “an ad’s ARPDAU gives you the quickest overview of how the ads or ad networks are performing.” He uses this metric along with eCPM to determine if the ads that an app is receiving are valuable and effective. With this information, adjustments can be made to boost the ads performance: “you can either switch to other providers or adjust the timing and placement of the ads,” added Stanislaw.

Pierre Germain, the Founder and CEO of Gerwin Software, highlighted the importance of ARPDAU. He thinks that Daily Revenue can quickly show how good an app is growing, but emphasized that the importance relies on the optimization of the revenue engine. “To get a bit deeper on the game health, I look into the ARPDAU, which tells how well the game itself is performing, including both in-app and ads,” he declared.

He also believes that eCPM, even though an easily accessible metric, is unfortunately “not a stable and reliable metric because it depends on the current mix of recent versus old and recurring users you have.”

Make advertisers interested with segmentation

Pierre’s most interesting insights relate to how user segmentation brings higher revenue: “your revenue per user will be much higher if you have a large proportion of new users that advertisers will compete to target. On the contrary, a game with an equivalent number of daily users composed of very loyal and recurring user will make much less on ads.”

He explained that it is very common to see a slow decrease of eCPM in a game after a feature. But these sudden changes in ARDAU or eCPM will give you the opportunity to analyze the app’s targeting of the acquisition campaign.

“Ultimately, the only way to analyze how well your game is performing, regardless of the user mix, is to compare how new cohorts of users are performing along in time, compared to older cohorts,” added Pierre, referring to a much more long-term point of view of an app’s lifetime performance.

Look ahead at the Lifetime Value of your app

Chris O’Kelly, the Head of Studio and Live Operations of Huuuge Games, uses ARPDAU and Daily Revenue as “isolated snapshots in time to review any Live Operations events and track the success of single actions” because they are key indicators of how an ad is performing. These two metrics are also potentially highly volatile depending on the game, but show insights on where to dig deeper to find specifically good or bad days.

“Over time these two combined with eCPM build the foundation to extrapolate ultimately and forecast your Lifetime Value and therefore define how much you can afford to spend on a user,” said Chris.

Success is paying attention to all metrics and making adjustments

ARPDAU and Daily Revenue are metrics related to an app’s overall revenue. But eCPM is a little more specific as it shows the performance of a particular ad inside your app. An app can hold as many ad types as the developer wants to implement at the same time (banner, interstitials, rewarded video, etc…). But always keep in mind the user experience is vital to make a game playable.

The right combination of a good user experience, strategic segmentation, and specific video ad formats implementation will be reflected in the app’s metrics, and that is the key to success when it comes to monetizing. There is no ready to go formula, as each app is different and requires experimentation to determine what works best in the long run.

As a mediation platform that works on the side of publishers, we know that understanding metrics is crucial. These are indicators of an app’s performance and also show where adjustments can be made to achieve the maximum potential of your app revenue.

We invite you to check our platform at Appodeal and take a look for yourself!

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